The 2nd Edition of the
Demographia International Housing Affordability Survey
expands coverage to the United Kingdom and the Republic of
Ireland, together with the nations included in the first
edition, Australia, Canada, New Zealand and the United
States.

The Survey rates the
affordability of the one hundred major urban property
markets of the six nations covered, using the Median
Multiple approach. This identifies the median household
income and the median house price of all these individual
urban areas and expresses the affordability, by the number
of years median household income, it would take to purchase
the median priced house. This is termed the Median
Multiple.

This Survey, in using this Median Multiple
approach, is unique in providing standardized comparisons of
affordability, within nations and internationally. It
clearly sets out why well governed urban markets achieve a
Median Multiple of three (3) or below. This means that
median house prices should not be any more than three times
median household incomes.

Affordable markets have a
Median Multiple Rating of 3 or less; moderately unaffordable
markets a rating of 3.1 to 4; seriously unaffordable markets
4.1 to 5.0 and severely unaffordable markets 5.1 and
above.

Of the six countries and one hundred major
urban property markets covered, 24 are affordable, 23
moderately unaffordable, 11 seriously unaffordable and 42
severely unaffordable.

All the major urban property
markets of New Zealand are severely unaffordable, as is the
major city of the Republic of Ireland, Dublin. Of the
Australian urban markets, six are severely unaffordable,
with two being seriously unaffordable. The United Kingdom
has just one moderately unaffordable market, with the other
eleven being severely unaffordable. Canada has three
affordable, four moderately unaffordable, one seriously
unaffordable with Vancouver being severely unaffordable. The
huge and diverse United States has twenty one affordable
markets, eighteen moderately unaffordable markets, eight
seriously unaffordable and twenty severely unaffordable
urban markets.

All the affordable markets are in North
America, with three in Canada and twenty one in the United
States. There are no affordable major urban property markets
in the United Kingdom, Ireland, Australia and New
Zealand.

New and existing house sizes differ
significantly among the countries surveyed. The average new
house size in Australia and the United States is about 2,200
square feet, Canada and New Zealand 1,900 square feet and
both the United Kingdom and Ireland an extraordinarily low
815 square feet and 930 square feet respectively. New
British housing is now only 15% larger than the former East
German slab developments, of which one million have been
vacated, since the reunification of East and West
Germany.

Whilst these house size differences are not
included within the Ratings of the Survey, the issue is
discussed and illustrated within the Survey Commentary. The
British and Irish housing stock is comparatively extremely
highly priced and of a poor standard.

The 2006
Demographia International Housing Affordability Survey
illustrates how affordable most urban markets of the
countries surveyed were five, ten and twenty years ago. Its
findings suggest that the major cause of the loss of
affordability within these markets is due to artificially
strangled land supply.

Mr Cox expressed the view that
this Survey will be of interest to emerging economies in
particular, as they are in the process of installing and
refining land use regulatory regimes that work best.

“Irelands spectacular growth has been based on sound
economic policies and is something to be admired” said Mr
Cox adding “But the Irish people have been denied housing
that befits their incomes. Must of the reason is
over-regulation of land. There are similar problems in
Britain.”

He concluded “The emerging nations of
Eastern Europe and Asia would do well to avoid these
mistakes by allowing the market to provide the best housing
possible, built where people want to live. There’s no reason
to do otherwise.”

The co author of the Survey Hugh
Pavletich, is of the opinion that it is up to communities
themselves to take responsibility for dealing with housing
affordability and ensuring that they achieve Median
Multiples of three or below, within a reasonable time.

“The Demographia International Housing Affordability
Survey provides a guide and readily understood measure, for
communities themselves to work together, in exploring
solutions to this serious issue.” said Mr Pavletich, adding
“ Good quality and abundant housing can only happen from a
foundation of good quality governance and communities that
care”.

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